uhmm.. are we in the recession?

 

You still have a job?

 

WMD

 

Where the economy go?

 

Nobel Prize 2008

Old man and the sea

"Sinking Ship"

Rescue

 

Broker

 

Filed under: Jokes , broker, Cartoon, economy, funny, job, Jokes, nobel, recession, rescue

Top 10 Scared Stock Traders of the Week

New York Stock Exchange 
October 9
Dow Jones down 675 points on the day

Frankfurt Stock Market
October 7
DAX declines 1.1% adding to the previous day’s fall of 7.1%

New York Stock Exchange 
October 9
The day was the 9th worst day in NYSE history

Frankfurt Stock Market
October 10
DAX down 401.92 points

New York Stock Exchange
October 10
Dow down 128 points

New York Stock Exchange
October 10
At one point during the day, the market dipped below 8,000 points, before rebounding

New York Stock Exchange 
October 9
The day was the Exchange’s 8th day of losses in a row.

New York Stock Exchange

October 10
The market has fallen 21% since the beginning of October.

New York Stock Exchange
October 10
The S & P 500 also was down on the day, declining 21.5%.

Frankfurt Stock Market
October 10
The day also say the Euro decline against the dollar.

time

Filed under: Business , desperate, dollar, euro, exchange, face, fall, market, points, stock

Making the Most Of Customer Complaints

Dealing with service failures means a lot more than just fixing the immediate problem. Here’s how to do it right.

 

Nobody’s perfect. That’s a fact, not an excuse.

Which is why it’s crucial for companies to realize that the way they handle customer complaints is every bit as important as trying to provide great service in the first place. Because things happen.

Customers are constantly judging companies for service failures large and small, from a glitch-ridden business-software program to a hamburger served cold. They judge the company first on how it handles the problem, then on its willingness to make sure similar problems don’t happen in the future. And they are far less forgiving when it comes to the latter. Fixing breakdowns in service — we call this service recovery — has enormous impact on customer satisfaction, repeat business, and, ultimately, profits and growth.

But unfortunately, most companies limit service recovery to the staff who deal directly with customers. All too often, companies have customer service sort out the immediate problem, offer an apology or some compensation, and then assume all is well. This approach is particularly damaging because it does nothing to address the underlying problem, practically guaranteeing similar failures and complaints.

What businesses should be doing is looking at service recovery as a mission that involves three stakeholders: customers who want their complaints resolved; managers in charge of the process of addressing those concerns; and the frontline employees who deal with the customers. All three need to be integrated into addressing and fixing service problems.

Tensions naturally arise in and among the groups. For example, customers can be left feeling that their problem wasn’t addressed seriously, even when they’ve received some form of compensation. Service reps can start seeing complaining customers as the enemy, even though they point out flaws that need fixing.

Managers in charge of service recovery, meanwhile, can feel pressure to limit flows of critical customer comments, even though acting on the information will improve efficiency and profits.

However, successfully integrating these three perspectives is something that fewer than 8% of the 60 organizations in our study did well.

Based on our research and our own years of work in service management, here is a look at the three stakeholders in service recovery, focusing on their different perspectives and the tensions that arise among them. We then make recommendations on how to address these tensions and integrate the aims of all three to achieve better — if not perfect — service.

 

The Customer

Fairness is typically the biggest concern of customers who have lodged a service complaint. Because a service failure implies unfair treatment of the customer, service recovery has to re-establish justice from the customer’s perspective.

Say a bank customer requests a deposit receipt from an ATM but the machine fails to print one. The customer becomes worried and goes to one of the bank tellers. The teller checks the account, and assures the customer that there is no problem, that the deposit was made. But if the teller only focuses on the fact that the account was credited, he or she has ignored what in the customer’s view was the most severe and critical aspect of the service failure: the worry initially felt, and the extra time it took to verify the deposit.

Customers often want to know — within a reasonable time — not only that their problem has been resolved, but how the failure occurred and what the company is doing to make sure it doesn’t happen again.

A customer’s faith can be restored using this kind of approach — once. We have even noted something referred to as a “recovery paradox,” in which customers can be more delighted by a skillful service recovery than they are by service that was failure-free to start with.

But there is a flip side to this as well: Customers have more tolerance for poor service than for poor service recovery. And if a customer experiences a second failure of the same service, there is no recovery strategy that can work well. In all likelihood, that customer will be lost forever.

Our research suggests that after a failed service recovery, what annoys — and even angers — customers is not that they weren’t satisfied, but that they believe the system remains unchanged and likely to fail again.

 

The Manager

The chief aim of managers in service recovery is to help the company learn from service failures so it doesn’t repeat them. Learning from failures is more important than simply fixing problems for individual customers, because process improvements increase overall customer satisfaction and thus have a direct impact on the bottom line.

But companies generally obtain and study only a fraction of the service-failure data that could be gathered from customers, employees and managers. Even when managers agree that customer feedback is essential, there is often poor information flow between the division that collects and deals with customer problems and the rest of the organization.

In some cases, one study revealed, the more negative feedback a customer-service department collects, the more isolated that department becomes, because it doesn’t want to be seen by the company at large as a source of friction. Some companies even create specialist units that can soak up customer complaints and problems with no expectation of feeding this information back to the organization. Others actually impede service recovery by rewarding low complaint rates, and then assuming that a decline in the number of reports indicates customer satisfaction is improving.

Some managers in our study saw conflicts between providing great customer satisfaction and achieving high productivity. For instance, incentive structures sometimes placed equal values on sales and on customer service. But as one manager noted: “If you want to achieve 100% [satisfaction], you don’t have time for selling. It’s questionable whether you can score 100% on service quality and 100% on [sales] objectives.”

In any kind of business, there comes a point at which a service recovery can become excessive in the company’s eyes, and be seen as giving away the store. However, many customers don’t want a payoff. They simply want to have their problem fixed and to be reassured that it won’t happen to other people in the future.

 

The Employee

Frontline service employees have the greatest job satisfaction when they believe they can give customers what they expect.

These workers have the difficult task of dealing with customers who hold them responsible even when the failures in question are completely out of their control. The attitudes of customer-service workers, positive and negative, spill over onto customers.

Yet companies do surprisingly little to support them.

To be successful, these workers need to feel that management is providing the means to deliver successful service recovery on a continuing basis. Alternatively, when employees believe management doesn’t support them, they tend to feel they are being unfairly treated and so treat customers unfairly. They display passive, maladaptive behaviors and can even sabotage service.

This alienation is compounded when the workers believe that management is not improving the service-delivery process, which keeps employees in recurring failure situations. Even though complaining customers represent an opportunity to fix problems and improve satisfaction, alienated employees often see them as the enemy. In a study of a major European bank, employees in Switzerland consistently indicated that they did not consider reports of missing account statements to be complaints. As one said: “These things happen. There is nothing we can do about that.”

At companies that reward low complaint rates, frontline employees become tempted to send dissatisfied customers away instead of admitting a failure has occurred.

 

Craig Frazier

 

Resolving the Tensions

Our experience with managers interested in improving service recovery indicates that most hope for a quick fix of some specific tensions. But quick fixes only treat the symptoms of underlying problems. Real resolutions should involve closer integration among the three stakeholders, such as gathering more information from customers and sharing it throughout the company, and adopting new structures and practices that make it easier to spot problems and fix them.

We suggest the following five strategies:

• Create a “service logic” that explains how everything fits together. This should be a kind of mission statement or summary of how and why the business provides its services. It should integrate the perspectives of all three groups:

What is the customer trying to accomplish, and why?

How is the service produced, and why?

What are employees doing to provide the service, and why?

The results should serve as a guide both for delivering service and for help with service recovery. It should include a detailed study of internal operations; map out how the company responds to customer complaints; and describe how the company uses that information to improve service-recovery processes. Similar mapping should detail every step of customer experiences, including those of real customers with complaints, highlighting their thoughts, reactions and emotions along the way. Highly skilled managers and employees who can think outside the box are a must.

TNT NV, a Netherlands-based global delivery company, developed a service logic to help it grow in a mature market. Using a small, high-powered management team backed up by customer discussion forums, the company mapped its processes from a customer point of view, including a map of customer emotions during both regular processes and service recovery. The mapping exercise and the service logic that it produced led to a redesign of processes by managers and field staff that cut across traditional functional boundaries.

For example, previously a driver running late for a scheduled delivery had to call into the control center, which would then contact customer services, which would then contact the customer. Such calls often arrived after the delivery already had been made, thus further annoying the customer and embarrassing the driver. Since the process redesign, however, a driver running late is allowed to contact the customer directly. TNT drivers frequently visit the same customers almost every day, so their customers know them and appreciate the personal contact. The drivers also appreciate being able to make the calls directly.

• Draw attention to the successes of customer-service groups. Companies use in-house publications, intranets and training programs to share stories that emphasize their values and culture. Employees who come up with cost-saving ideas, for example, are often singled out for praise. But rewards and recognition also should flow to heroes in service-recovery stories. Such heroes can be on the operations side, helping to develop cost-efficient systems for handling complaints, and on the marketing side, giving a customer extraordinarily helpful treatment after a service failure. Singapore Airlines Ltd., in its in-house magazines, frequently tells stories about employees who have provided not only outstanding service, but exceptional service recoveries. Senior managers, too, will not hesitate to swoop in anywhere there is an issue, creating more stories about internal vigilance. When customer-service employees believe that their goals are in line with the organization’s values, they are more willing to exert the extra effort required in a failure-and-recovery situation.

• Give customer-service staff as much freedom as your business strategy allows.When a business has very few routines and its ties to customers are based on individual relations, service representatives should have more autonomy in resolving complaints. For such businesses, spending more time on service recovery — and retaining customers — has a clear effect on the bottom line. By contrast, in a highly standardized business with purely transactional customer relationships, such as a fast-food restaurant, employees should adhere to procedures in resolving complaints. Customer satisfaction in such businesses is closely aligned with high productivity, so there is less to be gained by customizing resolutions of complaints. 

Ritz-Carlton, for example, the luxury brand of Marriott International Inc., authorizes personnel at the front desks of its hotels to credit unhappy customers up to $2,000 without asking a supervisor’s approval. On the other hand, in one of our consulting projects, a client reacted very negatively to this approach, claiming that such a policy would be too expensive for his company. We replied that the high cost of poor service is exactly what makes this system work so well: It forces management to eliminate service failures in the first place.

• Collect as much data as you can, and share it widely. Companies must gather more feedback about poor service, record it and make it accessible. Managers and other employees have to be armed with strong information to be effective at resolving disputes.

It should be easy for customers to file complaints. One way to achieve this is by offering many communication channels. A regional airline in Asia, for example, uses annual passenger surveys, interviews with frequent fliers, focus-group discussions, customer hot lines, critical-incident surveys, onboard suggestion leaflets and even live call-in radio shows. Software should be used that serves as a database for both positive and negative communications with customers. Employees and managers should be trained to mine the data and put it to use easily and quickly.

• Use meaningful measures of employee performance — rewards and demerits. Positive reinforcement and incentives should be offered for solving problems and pleasing customers. A system for measuring customer satisfaction should be devised to help rate employee performance. Salary increases and promotions then should be linked to an employee’s achieving certain levels. There also should be disincentives or demerits for poor handling of customer complaints. Performance reviews thus may include a balanced scorecard — one that recognizes the need for both productivity and customer satisfaction.

—By STEFAN MICHEL, DAVID BOWEN and ROBERT JOHNSTON. Dr. Michel is associate professor of marketing at Thunderbird School of Global Management, Glendale, Ariz. Dr. Bowen is the Robert and Katherine Herberger chair in global management and a professor at Thunderbird. Dr. Johnston is professor of operations management at Warwick Business School, University of Warwick, Coventry, England. Wall Street Journal, SEPTEMBER 22, 2008.

Filed under: Uncategorized , Complaints, Customer, failures, profit, satisfaction, service

Fear Factor: This Is Your Brain in an Economic Crisis

 

Three weeks after the stock market crash in 1929, Lawrence J. Fava jumped into the Schuylkill River in Philadelphia. He was a middle-aged real estate dealer, and he was “frantic” about the losses he had suffered, according to his suicide note. He left the note on the Girard Avenue Bridge and then leapt into the dark, frigid water, according to a small item published that month in the New York Times. But Fava survived the fall, and he regretted his decision at once.

Fava thought the Schuylkill River held a solution. Not a solution to his financial woes, alas, but to the anxiety that had hijacked his peace of mind. He was stalked by a fear of the future — “of the innocent persons who would suffer” because of his losses. But when he hit the river, he was suddenly afraid of something clear and present. Fava had perspective, and he clung to a piling in a desperate bid to undo his decision.

In the face of the current economic meltdown, some people have more reason than others to worry — people, for example, who need to spend their savings very soon. For them, fear serves a purpose: it encourages action, which may prevent further losses. But for most of us, what will happen in the stock market in three or 10 or 20 years, when we will most need our savings, is unknowable. We can’t predict the financial future, so we shouldn’t try. But anxiety doesn’t work according to those rules.

The part of the brain that takes over when we are frightened is called the amygdala. It’s an ancient, almond-shaped mass of nuclei located deep within the brain’s temporal lobes. The amygdala is designed to be wildly sensitive to certain things — for instance, anything uncontrollable and unfair (like a terrorist attack involving an airplane) — and remarkably forgiving toward other, far deadlier menaces that seem to be small in scale (car crashes) or involve less suffering (heart attacks).

Most of all, the amygdala loathes unpredictability of the kind we are currently enduring. Lab experiments with rats and humans show that both species prefer predictable electric shocks over unpredictable shocks. That’s because, on a normal day, the brain works by following shortcuts. We recognize patterns in order to make split-second judgments about what we are seeing. Shortcuts are ruthlessly efficient, which is important for an organ that only uses about 40 watts of power per operation. But the more uncertainty we face, the more shortcuts our brains use. And the shortcuts lead to a slew of predictable errors.

Shortcuts, for example, make us more prone to do whatever everyone else is doing — or whatever Jim Cramer tells us to do. “The brain cannot afford to re-evaluate on a millisecond by millisecond basis. So it will use other people’s opinion as a proxy for its own,” says Emory University neuroeconomist Gregory Berns, author of the new book Iconoclast: A Neuroscientist Reveals How to Think Differently.

To test this herd behavior, Berns and his colleagues hooked 32 people up to brain-imaging equipment and watched them reckon with a group opinion (about whether two shapes were the same or different) that was clearly false. They found that the brain worked to integrate the false opinion into its perception of the world. In other words, if other people start selling a stock you thought was valuable, you may want to do the same — at first.

In a state of high uncertainty, the brain wants most of all to do something — anything. “The natural urge, when we hurt, is to pull away,” says John Forsyth, an associate psychology professor in the Anxiety Disorders Research Program at the University at Albany, SUNY. Unfortunately, doing something — like selling stock or drinking heavily at the office — can make things dramatically worse.

Happily, the brain’s other defining characteristic is that it is flexible. Once we know our weaknesses, we can compensate for them. The part of your brain associated with conscious thought, called the prefrontal cortex, has a direct line into the amygdala and can quiet it down. This requires effort — and creativity. “The most productive thing is to recognize that it’s natural to feel anxiety in the context of unpredictability. A rat would be going through the same stuff,” says Forsyth, and he means that in a reassuring way. “And then sit with it. Do not let your feelings decide what to do. Feelings are fickle.”

It may also help to consider what you will do if you do lose everything. Literally, what will you do first, second and third? Contemplating action can shrink the threat to life size and introduce new possibilities. “We become very attached to our mentally constructed future,” says Forsyth. “The harder you hold on to your story about your future, the harder this will be.”

After Fava jumped into the Schuylkill River in 1929, his brain finally had a threat it knew how to handle. He held fast to the piling until he was rescued by a river police boat. The police delivered Fava to the Presbyterian Hospital, where he was revived.

 

By AMANDA RIPLEY Wednesday, Oct. 15, 2008. www.time.com

Filed under: Uncategorized , brain, Crisis, economic

If Things Fall Apart, Who Gets the Ring?

 

 

WHEN an engaged couple breaks up, does the ring go back to the one who bought it? Or does it remain in the hands — and possibly on the hand — of the recipient, especially if she was the one spurned?

 

Though a seemingly inconsequential issue when measured against the prospect of an unhappy marriage, the conflict over the ring has led couples to court.

“I probably get an e-mail every two or three weeks asking for my advice on this question,” said Joanna Grossman, aHofstra University law professor who has written on the subject.

“It is something that a lot of people dispute,” Ms. Grossman said. “People can spend an exorbitant amount of money on rings they cannot afford and then it is not uncommon for them to break up. But the rings are not usually worth enough to offset the cost of litigation.”

One high-profile case that was headed to court but was diverted by an agreement earlier this year was that of Sharon Bush and Gerald Tsai, the billionaire investor who has since died. In December 2006, Mr. Tsai gave Ms. Bush (the former wife of Neil Bush, a brother of the president) an 11-carat canary-diamond ring he bought for $243,040 at Saks. In January, the engagement was called off, and when Ms. Bush did not return the ring, Mr. Tsai filed suit in Manhattan Supreme Court seeking its return.

Ms. Bush and her lawyer, Raoul Felder, took the position that the bauble was not an engagement ring but a gift, and therefore did not have to be returned. Mr. Felder said that terms of the agreement could not be divulged but that she has since been seen wearing the ring.

“This was one of the other presents given on Christmas,” said Mr. Felder. “It was a nonconditional gift. I can’t understand how a man is not embarrassed to ask for his ring back. It always amazes me what happened to chivalry.”

Chivalry aside, in recent years courts have almost always held that the ring goes back to the buyer, no matter the circumstances. The premise is that the engagement ring is a conditional gift — the condition being that a marriage take place. And if it does not, the agreement is rendered null and void. Furthermore, courts have ruled that it does not matter who broke the engagement, the donor or the recipient.

“If you have no-fault divorce, you must have no-fault engagements,” said Joanne Ross Wilder, a principal in the Pittsburgh law firm Wilder & Mahood. In 1999 she won a ruling in a Pennsylvania case that is viewed as precedent setting: the ring should be returned to the donor.

“Before this case, there was a split of opinion in the United States as to whether the donor should get the ring back if he broke the engagement without just cause,” Ms. Wilder said. “If you get into who was at fault in deciding whether the ring should remain with the donee or return to the donor, you do a counterintuitive analysis. Isn’t the purpose of an engagement to be a trial period and isn’t it better to break an engagement than a marriage? Whose fault is irrelevant.”

But state by state, that view does not always prevail. Gary L. Nickelson of Forth Worth is president-elect of the American Academy of Matrimonial Lawyers. He said that in Texas exceptions were sometimes made depending on who instigated the breakup. Although the courts there generally accept the premise that an engagement ring is a conditional gift, he said that in a 2003 decision: “the court decided that if the donor was the one who broke the promise, then the recipient could keep it. It gets sticky if the groom calls it off. He has broken the condition, so some courts say that he should probably suffer and not gain rights to the ring.”

Ms. Grossman noted that trying to establish fault can be tricky at best and painful at worst. “Taking two people who decide they are not right for each other and putting their entire relationship on trial is usually not worth the economic or emotional cost,” she said.

Ownership of the ring did not become a problem for Dean Fechner and his former fiancée when their wedding plans were canceled in June 2007.

“The man should definitely get the ring back,” said Mr. Fechner, 36, of Manhattan. “It was intended to show that I wanted to spend the rest of my life with this person and that I put a value on our relationship.”

Last month Mr. Fechner, who works on Wall Street, sold the three-carat custom ring for $15,000 ($3,000 less than he said he paid for it) on idonowidont.com, a Web site that sells rings for couples who have changed their minds.

 

Letitia Baldrige, the etiquette expert, said the person who breaks the engagement is responsible for making good. “If the woman breaks it, she should send the ring back immediately,” Ms. Baldrige said. “If it is the man, he should say, ‘Of course you keep the ring.’ ”

Should the ring be a family heirloom, Ms. Baldrige added, the woman should return it. “But then he should buy her another piece of jewelry or simply give her a credit at a jewelry shop,” she added. “Nice people do that.”

Even those lawyers who define the ring as part of the contract to marry, and therefore subject to return if the contract is voided, recognize the need for exceptions.

“Assuming Mr. Wonderful is married to someone else and getting divorced and gives her a 4-carat ring, he is not legally able to become engaged,” said Eleanor Breitel Alter, who leads the matrimonial department and is a partner in Kasowitz, Benson Torres & Friedman in New York. “There are cases that say he cannot get the ring back because there was a legal impediment to the marriage at the time he gave it.”

Citing cases where estates seek to recover rings, she said: “Another complication occurs if the giver of the ring dies prior to the marriage and it is the death that prevents the marriage. Then the donee may keep the ring.”

Even after the marriage has taken place and the ring is unequivocally the property of the wife, questions may still arise. “Once the marriage occurs, the wife keeps it because the conditions were completed,” Ms. Alter said, “but if you upgrade the ring because one carat seems too puny, and get a 4-carat stone instead, that becomes marital property which can be divided in a divorce.”

It did not occur to Nadia Sookram, 29, a finance manager with MTV, to keep the one-carat solitaire she had received from Michael O’Neil, her college boyfriend. Even though plans for their wedding in July 2005 were well in place — a banquet hall had been booked, dresses for five bridesmaids chosen, and a photographer hired — when they broke up.

“There was no discussion about the ring, and he never asked for it,” said Ms. Sookram, who gave it back. “Throughout our whole relationship, he was broke and had been saving up forever to buy it. I asked my mother if she wanted money from the ring because we lost a lot of money on the wedding, but it’s not about the money. It’s about rebuilding and moving on. I feel proud of the decision.”

By NADINE BROZAN

The New York Times

Published: October 3, 2008

…

Filed under: Uncategorized , bush, court, divorce, engage, life, married, ring, tsai

Lets don’t get too seriously (please)..

Funny jokes from a beautiful woman. Enjoy..

Bono and guitarist the Edge are in a plane crash and end up standing in front of God, who is seated on his giant white throne. God asks them the same question. First, he turns to the Edge. “Edge, tell me what you believe in.” He responds, “I believe in Gibson guitars and in the fact that the world would be a much better place if we were alive to make more U2 records.” God tells the Edge to take a seat at his right. “Now it’s your turn, Bono,” God says. “What do you believe in?” Bono replies, “I believe you’re sitting in my seat.” — Sharin Foo, the Raveonettes.

One night a man rolls over in bed, giving his wife a big grin. She says, “Not tonight, honey. I have a gynecologist’s appointment tomorrow. I want to stay fresh and clean.” The man, feeling rejected, rolls over and tries to go to sleep. A few minutes later, he rolls over again and asks his wife, “Do you have a dentist’s appointment tomorrow?” — A joke from the Spider-Man and CSI: NY actress: Vanessa Verlito.

A guy walks into a bar and says to the bartender, “Quick, pour me 12 drinks.” So the bartender pours him 12 shots, and the guy starts shooting them back really fast, one after another. The bartender says to the guy,”Boy, you’re drinking those really fast.” The guy says, “Well, you would be drinking really fast, too, if you had what I’ve got.” The bartender says, “What’ve you got?” The guy says, “Seventy-five cents.” —Natacha Regnier, The Belgian movie star

Jorge and Ernesto are talking one afternoon when Jorge tells Ernesto, “I believe I’m ready for a holiday. Only this year I’ll do it differently. The last few years, I took your advice about where to go. Three years ago, you said to go to Paris. I went to Paris and Carolina got pregnant. Then two years ago, you told me to go to Rome, and Carolina got pregnant again. Last year you suggested Greece. And my Carolina? Pregnant again!” So Ernesto asks Jorge, “Then what are you going to do differently this year? Go somewhere less romantic?” Jorge says, “No. This year I’m taking Carolina with me.” —Like any sexy Spaniard, Leonor Watling smokes cigarettes and sings in a band, the names of which are Marlboro and Marlango, respectively. She is star of Talk to Her.

A blond goes into an electronics store and asks, “How much is this TV?” The salesman says, “Sorry, we don’t sell to blonds.” So she dyes her hair and comes back as a brunette. “How much is this TV?” she asks. Again the salesman says, “I’m sorry, we don’t sell to blonds.” A few weeks later she goes in as a redhead, but again he announces, “We don’t sell to blonds!” Finally she says, “My hair is red. How did you know I was really a blond?” The salesman says, “Because it’s not a TV. It’s a microwave.” —Jennifer Esposito is best known for playing a saucy secretary onSpin City, but since accompanying a friend on an audition (stealing it, naturally), she has appeared in 20 films, including last year’s Taxi.

A guy goes to the supermarket, and a beautiful woman smiles at him and says hello. He’s rather taken aback because he can’t place how he knows her. So he asks, “Do you know me?” The woman says, “I think you’re the father of one of my kids.” His mind travels back to the only time he has ever been unfaithful to his wife, and he says, “My God! Are you the stripper from my bachelor party that I made love to on the pool table with all my buddies watching while your partner whipped my butt with wet celery!?” She looks into his eyes and calmly says, “No, I’m your son’s math teacher.” —Noemie Lenoir, stars in Rush Hour 3.

This woman walks into a bar, and she has the hairiest armpits in the history of armpits. She sits down, raises her arm, and says, “Bartender, I would like a drink.” There’s an old drunk sitting next to her. Slurring, he says, “Barkeep, I would like to buy the ballerina a drink.” She accepts, drinks it, raises her arm again to get the bartender’s attention, and orders another. The old man says, “Barkeep, you just keep giving the ballerina anything she wants.” Finally, the bartender goes over to the drunk and says, “Sir, that’s nice of you, but how do you know she’s a ballerina?” The old man answers, “Son, you don’t get to be my age without learning that only ballerinas can lift their legs that high.” —Anne Hathaway, The star of The Devil Wears Prada

One day a little boy wrote to Santa Claus, “Please send me a sister.” Santa Claus wrote him back, “Okay, send me your mother.” —Tamara Feldman, The Dirty Sexy Money actress.

Why should all hurricanes be named after women? When they arrive, they’re wet and wild, and when they leave, they take your house and car. —Kristin Kreuk, The Smallville star.

One night, on a camping trip, Sherlock Holmes wakes up Watson and says, “Look at the stars. What do you deduce?” Watson thinks for a minute and says, “Well, I see millions of stars, many of which resemble our sun, which most likely have their own planets, which most likely have life-forms like us, so I deduce that there is life on other planets.” And Sherlock says, “No, you idiot, someone’s stolen our tent.” —Olivia Wilde, The House.

 

…

 

 

Excerpted from Esquire Magazine.

Filed under: Jokes , beautiful, funny, humor, Jokes, not, serious, woman

Financial Crisis Buzzwords

Finance for dummies, as Time says…

 

 

Definition: Troubled Asset Relief Program, the government’s term for the Wall Street bailout bill. The term was first coined by Treasury Secretary Henry Paulson. The $700 billion bill passed the Senate Oct. 1, the House Oct. 3, and was signed by President Bush that same day.

Usage: ”The point is that TARP is the only plan on the table that has both a reasonable chance of political success and a reasonable chance of economic success.” (Washington Post, Oct. 2, 2008)

 

Definition: Calm down. Naked shorting isn’t really naked — actually, it would make more sense to call it invisible because a naked short is a trade that doesn’t exist. Short sales occur when someone borrows a stock from its owner, sells it, buys it back at a lower price, and pockets the difference. Naked shorts occur when the short seller doesn’t bother to borrow the stock before he sells it. “Oh sure, I can get you that stock, no problem,” he tells the buyer, and the transaction rides on nothing more than a promise. Sometimes the seller comes up with the stock, but sometimes he doesn’t — or worse yet, has no intention of even trying. Oh, and by the way, it’s illegal.

Usage: “Bob McTeer, formerly of the Federal Open Market Committee, says: ‘I didn’t even know about naked shorts until recently—where you sell stock without even bothering to borrow it. That is even more absurd.’” (New York Times, Sept. 18, 2008)

 

Definition: When a money-market fund doesn’t have enough assets to cover every dollar invested in it (i.e. its net asset value falls below $1.00 per share).

After Lehman Brothers declared bankruptcy (the largest in the nation’s history), one of the country’s money-market funds — the $60 billion Reserve Primary Fund — broke the buck for the first time since 1994.

Usage: Money funds are designed to act like bank accounts. When you put $1 in you expect to get $1 out, including all the interest earned, any time you want. Faith in this promise vanished last Tuesday, when the Primary Fund — owned by the Reserve, the company that invented money-market funds — closed at 97 cents a share. In industry parlance, it “broke the buck.” (Bloomberg, Sept. 24, 2008)

Definition: Insurance for municipal bonds, corporate debt, and mortgage securities. These insurance contracts can be swapped from buyer to buyer, with no guarantee that the buyer can actually cover default losses.

CDS allowed banks and hedge funds to lend billions of dollars without tying up their reserves to cover such loans. The CDS market, which is not regulated by the government, emerged in the 1990s and has since ballooned to more than $45 trillion in mid-2007 — roughly twice the size of the U.S. stock market.

Usage: [Insurance company] AIG was on one side of these trades only: They sold CDS. They never bought. Once bonds started defaulting, they had to pay out and nobody was paying them. AIG seems to have thought CDS were just an extension of the insurance business. But they’re not. When you insure homes or cars or lives, you can expect steady, actuarially predictable trends….

My death doesn’t, generally, hasten your death. My house burning down doesn’t increase the likelihood of your house burning down. Not so with bonds. Once some bonds start defaulting, other bonds are more likely to default. The risk increases exponentially. (Reuters, Sept. 18, 2008)

 

Definition: Mortgage-backed securities which often earned blue-chip grades from rating agencies but became toxic when the sub-prime crisis hit.

Usage: ”AIG was pushed to the brink of bankruptcy by derivative-based guarantees it sold on mortgages and more complex mortgage-related products known as collateralized debt obligations. AIG suffered huge losses on these exposures as the housing market slumped, triggering downgrades by ratings agencies.” (Marketwatch, Oct. 3, 2008)

 

 

Definition: A method of accounting that values assets based on what comparable assets are worth in the open market. Many have blamed mark-to-market accounting rules for deepening the economic crisis because when failing companies are forced to unload their securities at bargain-basement prices, similar assets go down in value across the industry. The new financial rescue plan passed by Congress gives the SEC the authority to suspend the practice.

Usage: ”This arcane accounting rule requires companies to write down the value of certain assets to their current market value—defined as the price that similar assets are fetching in an open market.” (USA Today, Oct. 4, 2008)

 

Definition: One of the foundations of the government’s bailout proposal plan. The Treasury Department would hold an auction under which financial institutions would try to sell their bad assets. Whichever bank offered the lowest bid would get to sell their junk for cash. In effect, banks (the sellers) are placing bids, not Treasury (the buyer). Hence, reverse auction.

Usage: Once the bill is signed into law, Paulson will have many options open to him on how to unclog the credit markets, which Senator Judd Gregg, the top negotiator on the bill for Senate Republicans, described as a massive car accident in the middle of the highway. The government must clear the accident away by buying the toxic debt so that normal traffic can flow freely. One avenue will be to do a reverse auction, where banks compete to sell the Treasury their bad paper, with the Treasury choosing the lowest offers. (TIME.com, Sept. 29, 2008)

Definition: Credit allows the American economy to keep chugging along. A business or corporation that can borrow money can pay its employees, grow, and cover its expenses. With the lack of current confidence in our financial system, a credit and lending freeze has descended, with few banks feeling comfortable enough to extend credit to individuals or businesses. An extended freeze may result in layoffs and other drastic measures.

Usage: “The credit markets are frozen with fear. You can say it’s irrational, but given the money that has been lost over the last 12 months by investors who were willing to take risks, it actually looks smarter to be irrational about this than to be rational.” (Los Angeles Times, October 4, 2008).

Filed under: Business , auction, break, buck, collateral, credit, Crisis, debt, default, Financial, market, naked, obligation, reverse, shorts, swap, tarp

Are Bad Times Healthy?

By TARA PARKER-POPE

New York Times, October 6, 2008.

 

1936 In hard times, as in the Great Depression, laborers have more time to care for their children.

 

Most people are worried about the health of the economy. But does the economy also affect your health?

 

It does, but not always in ways you might expect. The data on how an economic downturn influences an individual’s health are surprisingly mixed.

It’s clear that long-term economic gains lead to improvements in a population’s overall health, in developing and industrialized societies alike.

But whether the current economic slump will take a toll on your own health depends, in part, on your health habits when times are good. And economic studies suggest that people tend not to take care of themselves in boom times — drinking too much (especially before driving), dining on fat-laden restaurant meals and skipping exercise and doctors’ appointments because of work-related time commitments.

“The value of time is higher during good economic times,” said Grant Miller, an assistant professor of medicine at Stanford. “So people work more and do less of the things that are good for them, like cooking at home and exercising; and people experience more stress due to the rigors of hard work during booms.”

Similar patterns have been seen in some developing nations. Dr. Miller, who is studying the effects of fluctuating coffee prices on health in Colombia, says that even though falling prices are bad for the economy, they appear to improve health and mortality rates. When prices are low, laborers have more time to care for their children.

“When coffee prices suddenly rise, people work harder on their coffee plots and spend less time doing things around the home, including things that are good for their children,” he said. “Because the things that matter most for infant and child health in rural Colombia aren’t expensive, but require a substantial amount of time — such as breast-feeding, bringing clean water from far away, taking your child to a distant health clinic for free vaccinations — infant and child mortality rates rise.”

In this country, a similar effect appeared in the Dust Bowl during the Great Depression,according to a 2007 paper by Dr. Miller and colleagues in The Proceedings of the National Academy of Sciences.

The data seem to contradict research in the 1970s suggesting that in hard times there are more deaths from heart disease, cirrhosis, suicide and homicide, as well as more admissions to mental hospitals. But those findings have not been replicated, and several economists have pointed out flaws in the research.

In May 2000, the Quarterly Journal of Economics published a surprising paper called “Are Recessions Good for Your Health?” by Christopher J. Ruhm, professor of economics at the University of North Carolina, Greensboro, based on an analysis measuring death rates and health behavior against economic shifts and jobless rates from 1972 to 1991.

Dr. Ruhm found that death rates declined sharply in the 1974 and 1982 recessions, and increased in the economic recovery of the 1980s. An increase of one percentage point in state unemployment rates correlated with a 0.5 percentage point decline in the death rate — or about 5 fewer deaths per 100,000 people. Over all, the death rate fell by more than 8 percent in the 20-year period of mostly economic decline, led by drops in heart disease and car crashes.

The economic downturn did appear to take a toll on factors having less to do with prevention and more to do with mental well-being and access to health care. For instance,cancer deaths rose 23 percent, and deaths from flu and pneumonia increased slightly. Suicides rose 2 percent, homicides 12 percent.

The issue that may matter most in an economic crisis is not related to jobs or income, but whether the slump widens the gap between rich and poor, and whether there is an adequate health safety net available to those who have lost their jobs and insurance.

During a decade of economic recession in Japan that began in the 1990s, people who were unemployed were twice as likely to be in poor health than those with secure jobs. During Peru’s severe economic crisis in the 1980s, infant mortality jumped 2.5 percentage points — about 17,000 more children who died as public health spending and social programs collapsed.

In August, researchers from the Free University of Amsterdam looked at health studies oftwins in Denmark. They found that individuals born in a recession were at higher risk for heart problems later in life and lived, on average, 15 months less than those born under better conditions.

Gerard J. van den Berg, an economics professor who was a co-author of the study, said babies in poor households suffered the most in a recession, because their families lacked access to good health care. Poor economic conditions can also cause stress that may interfere with parent bonding and childhood development, he said.

He noted that other studies had found that recessions can benefit babies by giving their parents more time at home.

“This scenario may be relevant for well-to-do families where one of the parents loses a job and the other still brings in enough money,” he said. “But in a crisis where the family may have to incur huge housing-cost losses and the household income is insufficient for adequate nutrition and health care, the adverse effects of being born in a recession seem much more relevant.”

In this country, there are already signs of the economy’s effect on health. In May, the market research firm Information Resources reported that 53 percent of consumers said they were cooking from scratch more than they did just six months before — in part, no doubt, because of the rising cost of prepared foods. At the same time, health insurancecosts are rising. With premiums and co-payments, the average employee with insurance pays nearly one-third of medical costs — about twice as much as four years ago, according to Paul H. Keckley, executive director of the Deloitte Center for Health Solutions.

In the United States, which unlike other industrialized nations lacks a national health plan, the looming recession may take a greater toll. About 46 million Americans lack health insurance, Dr. Keckley says, and even among the 179 million who have it, an estimated 1 in 7 would be bankrupted by a single health crisis.

The economic downturn “is not good news for the health care industry,” he said. “There may be slivers of positive, but I view this as sobering.”

 

(A version of this article appeared in print on October 7, 2008, on page D1 of the New York edition.)

Filed under: Health , Bad, economic, food, healthy, individual, insurance, jobs, populations, recession, Time